What does it mean when developers announce a Capital Appreciation for a project?
For buyers, it simply means that if you reserve a unit before the Capital Appreciation Day, you lock in today’s price. Once the new pricing takes effect, all remaining inventory will be sold at a higher price. As an early buyer, you benefit because you purchased at a lower price point before the price increase.
A good example is Caleia at Vermosa by Alveo. The developer announced a capital appreciation effective July 16, which means buyers who reserve before then can still purchase at the current price.
Why do developers increase prices?
Aside from strong sales take-up, scheduled price adjustments, higher construction cost, and not only when the featured photo on this post is now a reality, capital appreciation often reflects important milestones in the estate and its surroundings. Madami talagang factors and these include:
- New retail and commercial establishments opening
- Schools becoming operational, such as De La Salle Zobel Vermosa
- Progress in roads, parks, and estate amenities
- Major infrastructure projects that improve accessibility, making it easier to travel to Metro Manila, nearby cities, and the airport
However, in the Philippines, a developer’s capital appreciation does not automatically mean the resale market has increased by the same amount.
Take BGC as an example. A preselling one-bedroom unit from a developer may be priced between ₱25M and ₱28M, while a comparable unit in the resale market may still sell for ₱15M to ₱18M.
The same can be seen in Nuvali, where a newly launched Alveo residential lot may sell for ₱15M to ₱20M, while similar resale lots may range from ₱10M to ₱14M.
From here, you can see that every developer price increase establishes a new benchmark. I’ve seen this pattern throughout my two decades in real estate.
While the secondary market may not immediately catch up, it gradually supports higher property values over time, especially as the estate matures, infrastructure is completed, and demand continues to grow.
The two don’t always happen at the same time but over the long term, quality developments with strong fundamentals have a much better chance of closing that gap.
Buying preselling now is not really buying it for what it is now. It is buying into what it will be tomorrow.
— Myra 🤍
